Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Technology Stocks : Cymer (CYMI) -- Ignore unavailable to you. Want to Upgrade?

To: Carl R. who wrote (12786)	1/17/1998 9:25:00 PM
From: Jess Beltz	Read Replies (1) \| Respond to of 25960

ET, I would like to second Carl's support of Zeev. I too have found his opinions to be very accurate and valuable, much more so than those of the individuals who relentlessly paint optimistic views that we've turned the last downside corner with this stock. Zeev is not alone by any means. You should check out the "Semi-Equips - Buy when the BLOOD is Running in the Streets" thread, where you will find the equally valuable comments of Jay Harris, who I believe has a very accurate finger on the pulse of the semiconductor industry. Both men feel that the problem right now is not with Cymer as a company, but with the sector as a whole, and with the cycle dynamics for how the market prices the sector, and both men feel that more trouble is on the way. I have to agree. I do not have the understanding of the cycle that these guys do, but I see the following: despite the occasional one day tech rally, the Market pretty consistently ignores good news coming out of SE Asia (like Thursday) and punishes the sector hard on any bad news, and I think there is quite a bit more bad news to come. Minor points: (1) The South Koreans are likely to try and renegotiate their contract with the IMF. (2) Thailand is screaming about the economic hardships being suffered there. It seems like even tougher austerity measures are required, and the Thai people have nothing left to give. (3) Mr. Harris has mentioned that while DRAM prices are inching back upward, the devaluation of their currency has given the South Koreans a virtual price holiday on the cost of DRAM, and so we can expect them to dump DRAM in a major way in the next 6 months, further depressing DRAM prices for the next 2 quarters. Major Points: (1) Suarto's health, and the uncertainty around it will cause many more problems with the value of the Indonesian Rupiah. I don't actually worry about the Indonesian economy itself: it's all of the SE Asian banking houses with equity or worse, debt positions in Indonesia that are the problem. Look for more failures ala Peregrine. For Hong Kong, in addition, continued high interest rates will keep the property market under extreme pressure, and more banking and property market related failures could easily result. (2) The Japanese quick-fix for their economy is a worthless bandage that really addresses none of the major problems with the Japanese Economy or Banking system. Look for the Nikkei to continue to slide dramatically in the next 6 months. It may well be that Wall Street already recognizes this, but will still react negatively as the situation deteriorates. (3) China: Despite repeated announcements that it will not devalue the Yuan, it may eventually have to. I have seen estimates that in the next year, the Chinese will lay off over a million employees in the railroad industry alone, and there are many other state-supported firms and industries that will be affected. In the face of so much unemployment, can the Chinese afford to see more layoffs because their export products are no longer competitive because of relatively lower valued regional currencies? I think not. In addition, there are major questions now about the quality of the Chinese banking system. For Semi stocks, the broad and unignoreable implication is that the market is very Bearish on any part of the sector with exposure to Asia, and Cymer has a ton of such exposure. The liklihood of order pushouts for semi equipment upgrades is real and undeniable. This is the reason for the bearish sentiments of these individuals, and not any malicious caprice on their part to depress further the price of stocks which have already suffered a great deal. I wish with all of my heart that I had known both men back in September. I would still have most of my money today, and believe me, I lost a bundle buying into the story that the price of Cymer simply could not go any lower. jess